Yahoo! Case Study

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YAHOO! Inc. 2006

|I. Current Situation |

A. Yahoo’s Current Performance (2006)

In 2006, Yahoo’s return on assets plummeted from 18.95% in 2005 to 6.73% in 2006. In addition to the poor return rates, Yahoo’s market share dropped from 30.5% in July 05 to 28.8% in July 2006. Google (Yahoo’s main competitor) however, showed an impressive market share increase from 36.5% in July 2005 to 43.7% in July 2006. Yahoo’s Profitability (Return on Assets) dropped 12.22% (18.95% in 2005 to 6.73% in 2006).

• Total revenue was $6,425.68 (million) in 2006

• Gross Profit $3,756.58

• Net Income $751.39
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Natural Physical Environment: Sustainability Issues

• Technological changes are happening quickly

• Inflation

• Demand Irregularity

• Competitive Pressure

B. Societal Environment

1. Economic

• Rising consumer prices: When consumer prices increase, everything else follows suit.

• Credit card percentage: As percentage rates increase, consumer “impulsive” buying may decrease.

• Shipping: As fuel cost increase, product shipping costs increase.

2. Technological

• Increased Internet availability / access: Free web browsers, e-mail, Wi-Fi, etc.

• Global Internet advertising and corporate exposure

• Free web applications “apps” and the demand for social and business networking

3. Political-legal

• Constant revisions to Privacy Laws: Privacy Violations are under constant scrutiny and the costs of monitoring these issues can be costly

• Politicians using the more popular browsers to promote a political agenda by influencing the consumers

4. Sociocultural

• Consumers reliant on mobile devices (smart phones)

• Increases in the younger and more computer savvy consumers.

• Increased availability for global shipping for internet purchases

C. Task Environment (Five Forces)

• Bargaining power of Suppliers:

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